Mission Model or Business Model?
What can businesses learn from mission-driven organisations and what can mission-driven organisations learn from business model thinking?
The Mission Model Canvas is the much lesser known sibling of Strategyzer’s Business Model Canvas and was created a number of years ago when government agencies started adopting lean startup as a methodology and approach to solving government problems. What those early adopters noted was that there were some key differences between what drives corporate enterprises (money) and what drives government or other non-profits (mission). And so Alex Osterwalder, the mastermind of the Business Model Canvas (BMC), and Steve Blank, the man who started it all with his work on customer development, created a version called the Mission Model Canvas (MMC). For further background, here’s Steve Blank’s original blog on the MMC from 2016.
As an ex-government employee who works with private enterprise, I like to mix and match different parts of the canvases depending on the circumstances, which isn’t just about whether it’s a for-profit organisation or not. This article takes you through the key differences between the two canvases and explores how business can learn from mission-led organisations and what mission-led organisations can learn from business model thinking.
Customers become Beneficiaries
On the far right of the BMC, we have Customer Segments — these are the people for whom you are creating your value proposition. You’re solving a problem for these people and they’re going to pay you for that solution. In its place on the MMC, Customer Segments become Beneficiaries. Whenever I use the word ‘customer’ in a government context, it tends to invoke a pretty strong antibody response. Someone will usually stick their nose in the air and denounce the word, purporting, “We don’t have customers, we have partners.” Hmm.
When looking at a department or agency’s high level Mission/Business Model, I encourage them to stick with the word customer. Customers and Partners are NOT the same thing and are not interchangeable; it’s important we know the category in which the segment of people we’re talking about in a given context fits. Believe me, government most definitely has customers and most parts of government, not to mention the people they serve, would benefit from putting customers at the centre of its operations. I think it is the implication of payment and revenue that turns government folks off the word customer. So, I encourage them to stick with it but switch the currency from money to value. A customer is someone we’re creating value for — someone whose needs we are meeting, whose problem we are solving.
Conversely, whether you use the word Customer or Beneficiary, this concept that they are the person we are creating value for, is helpful for any internal innovation initiatives. Whether you’re a for-profit company or not, if you’re creating a new product or service for internal employees, money is unlikely to be changing hands. Instead, our currency is about the benefit we bring to end-users. Therefore, in the context of internal innovation, the Mission Model’s use of the word Beneficiary may feel more appropriate.
Customer Relationships become Buy-in and Support
Similarly, for any internal innovation team in any large organisation, focusing on internal Buy-in and Support over the nature of the external Customer Relationship makes total sense in the early stage of any innovation project. Corporate innovation is all about understanding and navigating the silos and politics that unfortunately dominate the way our organisations work. Whatever your frontline business is, it can crush a new idea in a second for no particular reason at all. Understanding whose buy-in you need and enlisting the support of early adopters and advocates will likely be the difference between life and death of your idea, no matter how good it is.
From a government perspective, sometimes Buy-in and Support is most important — not just of key stakeholders in the department but across departments and, potentially, external investors given the number of public-private partnerships there are. However, there will be times when we really need to just focus on the customer and the type of relationship we want with that customer.
For example, I have encouraged a focus on the Customer Relationship element when the current nature of the relationship is ripe for reinvention, such as a service that is particularly high-touch and resource intensive or where there is a breakdown in the relationship/high customer dissatisfaction. The relationship really needs to be explored here as well as the knock-on impact on other parts of their mission model.
Channels become Deployment
Channels and Deployment really mean the same thing — it’s about how you’re going to get your value proposition, whether that’s a product, service or other solution, to the end-user/customer/beneficiary. This is the most subtle change between the BMC and the MMC and is really just about what terminology resonates better with government people.
Personally, I prefer the word Channels. The mere presence of the ‘s’ suggests there may be multiple options — which of course there are — and that those channels might change. In contrast, Deployment suggests a once-and-done waterfall approach to me. Which is probably why it resonates with government…
Revenue Streams become Mission Achievement/Impact Factors
This is the one box that has to change for government and non-profit mission models. How we measure impact or value is a constant source of debate. It’s certainly less tangible and more subjective than revenue. But it can be and must be done, usually using a combination of leading and lagging behavioural indicators that can be metricated in some way. Unfortunately, rather than opting for imperfect indications, impact often goes completely unmeasured.
Sometimes I would turn the revenue question on government capability or innovation teams and ask them, if your customer/beneficiary had to pay for this product, would they? How much would they pay? Exactly how valuable is it to them? Often this line of questioning just helped to focus minds on finding ways to measure impact. The bottom two boxes of the canvas of the MMC are essentially posing the same viability question: should we do it? Is the investment of public funds and resources worth the anticipated impact? If we can’t define that impact, we can’t answer this question.
As a minimum, we should be able to answer things like the scale (how many people will benefit) and the efficiency (hours or money saved). Other types of impact are harder to quantify. For example, if you’re working on an idea that only benefits a very small number of people, but potentially saves the lives of those people, is it worth it? It would be wonderful if the answer could always be yes to this but resources are finite and a decision to invest in one area means a decision not to invest elsewhere, on something else that may also have significant impact on quality of life or life itself.
For this reason, these decisions can’t be taken in isolation. Instead, they should be considered as part of a portfolio where the impact of one initiative is relative to the impact of another. Vision and strategy are also important when considering and measuring impact. Vision tells us where we’re aiming for and strategy tells us how we think we’re going to get there. If the anticipated impact of a proposed idea doesn’t align with the vision and strategic priorities of a mission-driven organisation, it should be a red flag for further investment.
This focus on impact over revenue also makes sense for most internal innovation projects in a private enterprise. But I think there’s more corporates can learn from government here. A corporate is there to generate profit, of course it is, so the revenue streams of its business model are essential. However, that doesn’t mean they can’t simultaneously focus on value creation and impact.
A successful business must have a vision, a compelling ‘why’ it exists beyond making money — it is, in some way, improving the lives of its customers or even improving the world in which we live. Shouldn’t every business model be able to articulate the impact it has on people’s lives? I’m not suggesting that Mission Impact should replace Revenue Streams as part of business model development — just that it could, and probably should, happily co-exist.
Key Points
- Adopting more business-centred language in government and other mission-driven organisations can help create a greater focus on customer-centricity and how it’s enriching the lives of the people it serves.
- In addition to focusing on their revenue streams, corporates should consider their own mission and the impact their business model is having on its community and customers.
- Many internal innovation projects, whether they’re in non-profit organisations or not, could benefit from using the MMC.
- Both the BMC and MMC are great tools for developing new ideas — you don’t need to rigidly stick to the boxes of one or the other — but use the elements that are most helpful to your particular context.
If you would like to learn more about either the business model canvas or the mission model canvas and how to use them to develop your ideas and businesses, Yellow Cat Innovation provides business/mission model workshops and coaching for corporates and startups. Get in touch.
